CO2 rules not driving car prices higher

BRUSSELS, Oct. 5 (UPI) -- European automakers' claims that stricter CO2 emission standards would result in higher car prices aren't being borne out in fact, new research indicates.

Transport and Environment, a Brussels environmental group campaigning to strengthen the European Union's sustainable transportation efforts, released a report last week concluding auto prices have fallen as European automakers have been forced to make more fuel-efficient and cleaner cars.

Automakers argued that cars would cost as much as $3,100 more when legally binding EU demands to reduce CO2 emissions to 140 grams per kilometer by 2008 were phased in.

But now that the industry average for new cars have fallen to less than those required levels, car prices, rather than increasing, were lower last year -- 2.5 percent cheaper than in 2009, the report noted.

"The car industry has consistently resisted fuel efficiency regulations by complaining that cars would become 'unaffordable,'" Transport and Environment Director Jos Dings said. "But car emissions have now dropped to 140 grams of CO2 per kilometer and that simply hasn't happened -- prices have actually fallen in real terms."

The upshot, he said, is that the EU should continue to push for stronger emissions and fuel efficiency standards and not be swayed by automakers' predictions of higher prices.

"Clearly the EU needs to learn lessons from this. When it comes to future targets to improve fuel efficiency, industry cost estimates should be taken with an SUV-sized pinch of salt," he said.

The report stated the average car sold in Europe last year was 4 percent more fuel efficient, emitted 4 percent less CO2 and was 2.5 percent cheaper than in 2009.

Breaking it down by manufacturer, the research determined that Volvo had made the biggest fleet-wide CO2 reductions but still was second only to Daimler as the biggest overall emitter.

Fiat was one of lowest-polluting manufacturers with a fleet average of 126g/km, with Toyota and Peugeot-Citroen next at 130g/km and 131g/km, respectively.

Autos made in Slovakia were deemed the worst for CO2 emissions, with an increase of 1.3 percent over 2009. German-made cars, meanwhile, registered an emissions reduction of 1.8 percent, which the researchers said represented the second-weakest progress of any country in Europe last year.

Automakers have continued to issue warnings about price increases due to EU emissions standards. The Brussels journal EurActiv noted the European Automobile Manufacturers Association has argued the current EU target of 130g/km by 2012 would "lead to a price increase per car of up to ($3,900) on average."

The association was put on the defensive by the research contradicting their claims, EurActiv reported.

A spokeswoman told the publication the industry had made "great progress" in reducing CO2 emissions and in absorbing fuel efficiency costs, thanks to factors such as "manufacturing lead-time, affordability, support for breakthrough technologies, relevant infrastructure changes" and "the use of alternative fuels."

Carmakers also have been able to keep prices down to due to "economic environment, market demand, business models, the location of manufacturing and the pace of R&D expenditure."

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